First Year of Retirement

First Year of Retirement

The first year of retirement can be one riddled with emotions, and adjustments.  After a 40-plus year working career for the first time in a very long time, you have no work obligations.  There is no longer a need to attend those Monday morning internal meetings or report to a boss (besides your significant other of course).   No case of “The Mondays” or the need to set an alarm clock anymore.  Basically, it is a year of adjustment on many fronts.

Retiring Over and Over

A hazard of my job is I’ve physically, emotionally, and financially “retired” thousands of times throughout my career.  It is a time when most work a lifetime to achieve it, and few of us are prepared to face it.  As far as the emotional and psychological components are concerned what I can tell you is that you will adjust, much like the fall of the Roman Empire, slowly, then all at once.  Your days will become more packed than you can imagine, and “How did I ever have time to work” will be your new favorite saying.  You will shed the “working you” and grow into your retirement skin very quickly, I can assure you.

The Financial Side

The more nuanced perspective I get to see, however, is the financial side of things.  As you see the other adjustment, and probably a bigger one for most to adjust to, is you no longer get a paycheck every two weeks.  As a matter of fact, you will no longer get a paycheck for the rest of your life and that, for most, can be quite an adjustment.  The other large financial adjustment is without a paycheck, or 9-to-5 job to report to adjustment financially to what you are spending takes some real cognizant effort.

To me, this is the financial key to living a responsible retirement.  Most of us can take an educated guess on what those retirement expenditures will look like, but until you go through an actual year of retirement you won’t truly know what your new lifestyle costs.  Will you be traveling more?  Visiting the grandkids on both coasts?  Are you going to rent an Airbnb in California to help your one son out 2 months a year, then go to Florida for another 2 months a year?

Now I’m not overly concerned about your first year of retirement spending.  For many, it is a little bit of a celebration and vacation from what your new life will entail.  The key, however, is that you log your expenses for the year.  I highly recommend that you, and your spouse if you have, carefully understand where all your money is going that first year.  Then at the end of the year, you will have a sense as to what money you spent.  The other key to this analysis is after that first year getting an understanding of which of those expenses are here to stay, and which were possibly one-time splurges.

The Big Reveal

This all leads to the big reveal/summation.  Now you can accurately predict A. what your new lifestyle will entail, B. what your new lifestyle won’t entail, and C. what your new lifestyle costs.  Naturally, this is key to planning and your finances as finally we can craft a real plan to how, and if, to sustain this ideal retirement lifestyle.

You see from our seats this data is critical to being able to give ongoing guidance as it pertains to investment planning and retirement planning.  Without this critical information, you and we are shooting targets in the dark.  The first question someone always asks me is how much I need to retire.  My answer is 100% of the time a question right back, how much will your retirement cost?

So, although that first year of retirement takes a lot of adjustment and soul searching make sure you are keeping tabs on the financial side.  This will allow you to keep enjoying those golden years and filling your days with who knows what, but what we do know is how the heck did you ever have time to work!

Stay wealthy, healthy, and happy!